An uncommon bet in the late 90s helped catalyze the social entrepreneurship movement

Every social entrepreneur remembers forever the people and organizations that took a chance to help them bring their dream to life. As we prepare for my organization’s 20th anniversary, I’ve been thinking a lot about the late Bob Rogers. Bob, who took over for Ewing Kauffman as president and CEO of the Kauffman Foundation, was instrumental in helping me launch New Profit in 1998, making it one of the first venture philanthropy organizations. Thanks to Bob’s vision, the Foundation was one of the four original funders of New Profit.

I never got to meet Mr. K, but Bob exuded the same passion for entrepreneurship as his mentor, and I believe both of them would appreciate what we are doing together with the Foundation today.

We’ll celebrate our anniversary next week at our Gathering of Leaders event in Boston. As it happens, the Foundation was also one of the original sponsors of the Gathering, which is now in its 14th year as a convening of social entrepreneurs, philanthropists, and their counterparts from across sectors to discuss the biggest opportunities and challenges facing social problem solvers. I can only imagine what our dialogue would be like if Bob Rogers and Ewing Kauffman were there to join in on the conversation.

“It’s your right to be uncommon.”

There’s an infinite variety of entrepreneurs and entrepreneurship, but it’s fair to say most people think that that starting a business or an organization is about selling widgets. Often, it’s not that straightforward. Many entrepreneurs, including myself, don’t fit traditional molds or follow conventional wisdom. I love this quote on the topic from Mr. K:

“You should not choose to be a common company,” he once said, paraphrasing a passage from An American’s Creed by Dean Alfange. “It’s your right to be uncommon if you can. You seek opportunity to compete. You desire to take the calculated risk, to dream, to build, yes, even to fail, and to succeed.”

That’s where New Profit comes in.

In the mid-1990s, after I founded two other nonprofit organizations, the Women’s Information Network (WIN) and Public Allies, I decided to travel around the world interviewing social entrepreneurs who were part of what I saw as a growing movement for disruption and transformation in social problem solving.

During the trip, I stopped in a rural village in Vietnam to meet a mother who had developed a powerful way to drive down infant mortality by supplementing a baby’s diet with ground shrimp.

Our interview and the experience were moving, because the positive effects on the village created by this innovation were so dramatic. This was brought home by what we saw several miles down the road. There, we came to another, very similar-looking village with the same iconic Coca-Cola’s logos on the walls and tiny storefronts. But, as we soon found out, there was a big difference: the shrimp meal solution was missing, and babies were dying at a rate alarmingly higher than just a few miles away. This realization changed the course of my life.

The question that I almost screamed to myself at the time was, “Why don’t the best social innovations scale like companies and commercial innovations do?”

One key element of the answer is that there is no dynamic capital market behind social impact to incentivize competition and innovation, respond to demand for great solutions, and lift up those that maximize impact.

In the late ‘90s, when we founded New Profit, philanthropy was operating more or less the same way it had been for one hundred years (and often still does). A few longstanding organizations had achieved national scale, while the vast majority of nonprofits never came close to crossing the $1 million revenue threshold. Funders were not focused enough on directing resources to the approaches that could get the greatest results, or on systems change approaches, where the true possibility of impact at scale lays. Grant making was almost entirely focused on programs and services (“buy” resources), rather than sustainable capacity building (“build” resources). Innovation was lagging. Taken together, these dynamics left a big gap between funders’ enormous ambitions and the results they were able to achieve.

We dove into those gaps with a venture philanthropy model that prioritized providing those social entrepreneurs developing promising models with unrestricted capacity building capital and strategic support to help them grow their organizations and take aim at larger systems within which they operated.

New Profit’s unfolding story

The original bet that Bob and the Foundation made on me has paid off in ways that I couldn’t have imagined in the beginning. It is no hyperbole to say that he and the Foundation helped catalyze a nascent social entrepreneurship movement that has changed millions of lives for the better over the last 20 years.

We have been incredibly fortunate to support and partner with the leaders – we have invested in nearly 100 over the last two decades – who have catapulted the movement forward. I encourage you to read their stories and be inspired, like we are, every day and see the collective impact.

Forging into the future

While I’m incredibly thankful and fortunate that Bob and the Foundation decided to take a chance on me so many years ago, the New Profit community writ large will reap the rewards of the Foundation’s support for the upcoming Gathering of Leaders event.

This is a critical moment when entrepreneurs and other leaders need to get actively involved in shaping a fast-arriving future. To be successful over the next 20 years, we have to keep building community among and around entrepreneurs and other leaders. Bob helped instill that belief in me and it has become part of New Profit’s ethos.